Re-blogged from Grant Robertson in the P2P Weblog, this article is a good overview of how the big content companies are slowly discovering how the P2P filesharing infrastructures can be used to their benefit, as a way of externalising distribution costs.
P2P Weblog: “There is little doubt that P2P will play a huge role in our non-stop-content consuming future. According to market research firm Strategy Analytics, major media players such as Disney, Sony, Warner and Universal will harness peer-to-peer networks in order to lower cost and reap the benefits from millions of dollars in “free” bandwidth.
“Regular high profile coverage of disputes involving content distribution websites of uncertain legality tend to imply that P2P is inherently a “bad thing,” said James Penhune, Director of Broadband Media and Communications research. “P2P will ultimately provide considerable benefits for content providers seeking to tap into the growing demand from consumers for video, music and games delivered over the Internet.”
In the process these companies may change how the Internet operates. Controling the files via DRM will allow companies to freely distribute files, but still control who, how and where the media can be enjoied.
If commercial content providers are allowed to shift the burden of distribution on to the back of home-broadband connections, residential ISPs will face significant pressure. Many ISPs are already working to change laws that govern the Internet and, if their first attempt fails, don’t be surprised to see them back again, only this time with more data on how P2P content distribution is forcing their hand into changing the way they charge for internet access.
Two companies are already leading the charge into consumer-provided distribution networks. EMI, who recently announced a deal with veteran P2P name Qtrax, will use consumers broadband connections in conjunction with Qtrax client software to allow users the ability to listen to songs before buying them. At the same time, EMI plans to serve those listeners with advertisements, covering the cost of its own licensing fees. What would normally be financially impossible due to bandwidth costs, EMI is making possible by pushing those large pipe bandwidth needs down the channel, to the thousands of smaller but still effective home broadband connections.
Warner Bros, who recently announced a deal with P2P software provider Bittorrent will do much the same thing, only with the much higher bandwidth requirements of digital movies. At the time of the announcement, I didn’t see the point. But the recent fight around net neutrality makes one thing abundantly clear, the real pink elephant in the room is that companies want to use your bandwidth to increase their bottom line.
Make no mistake, this is what Web 2.0 means to the content providers. Lowering the cost of delivery to nothing while holding the line on prices, or finding new ways to charge for the same content are the only avenues the content owners seem to be able to find in order to satisfy shareholders with huge growth numbers in stagnent markets.”